Ukraine has been under quarantine for almost a month now. Due to strict restrictions, business has virtually stopped working. What awaits entrepreneurs when the quarantine measures are eased and whether the Ukrainian economy will withstand the global crisis, told the channel "PravdaTUT" Roksolana Pirtko, Chief Managing Director of Roksolana shopping mall and Spartak shopping centre.
What does business feel like during these few weeks of uncertainty?
- Businesses have a feeling that if the coronavirus does not kill us physically, it will definitely kill us economically. Personally, we immediately felt the impact of these quarantine measures on entrepreneurs because we manage real estate in various areas. We rent out housing, office property, and have large shopping centres. So I immediately feel how small, medium and large businesses are reacting to all these restrictions.
At the beginning of the quarantine, business was more or less relaxed. In the first week of March, we all worked hard and treated the quarantine as a kind of holiday, a break, no one took it seriously. But as the restrictions continued, everyone started to panic. First of all, because businesses cannot predict how long the quarantine will last. No one can know in advance what the consequences will be. Business in Ukraine has already experienced many crises - economic, political and military. But there has never been such a large-scale global and European crisis at the same time. When any business, industrial and even social activity is simply stopped. And the point here is not that the dollar is rising or consumer sentiment is changing - people are really afraid. They are being restricted in their right to leave the house, visit retail outlets, and use any additional services other than the minimum necessary. That's why I can say that business is in a panic right now. No one knows when it will end.
What do you think will be the consequences of this downtime?
- Large losses. This will include salary payments, taxes, utility bills, and debts to all suppliers. In business, there is always a period of operating credit when you do business and pay after you have received services or after you have, for example, sold goods. Now, during that period of downtime and because you cannot sell the goods, the losses will be unrealistic. After all, in addition to all this, there are also fixed costs that you cannot refuse. You have employees, you need to pay their salaries and taxes. Not to mention the lost profits, which I think everyone has already forgotten about.
Now every week, the operators we work with, the entrepreneurs, simply calculate the amount of losses and realise that there is no end and no deadline. In my opinion, about 30 per cent of businesses in Ukraine and Lviv in particular will cease operations. This will mostly concern weak operators that had operational problems even before the introduction of quarantine measures. People will be forced to lay off employees. Accordingly, unemployment in Ukraine will increase. This will be a massive result of this quarantine.
We should expect a decrease in the number of entrepreneurs. Their debts will grow and the unemployment rate in Ukraine will increase.
But I want to say that these are not the only consequences that will lead to a general economic downturn. We need to expect that even those entrepreneurs who will continue to operate in the country will need special conditions - from all partners and the government in particular.
Everyone should understand that when these quarantine measures are over, it will not be the end of all troubles, it will only be the beginning. After all, these troubles will have to be overcome somehow.
Do you currently charge rent for your premises?
- Since 17 March, we have not been charging rent to tenants who have legal restrictions on their activities. We have made this decision since the beginning of the quarantine. Now is not the time to think about your earnings, so we are meeting our office tenants halfway. In this case, we need to think deeper. We already feel panic among tenants, we feel that their business environment has changed dramatically. It's not that they don't want to pay rent to save money. They really can't do their business because they don't have orders. People are actually so panicked now that they have stopped ordering even online.
When the quarantine measures were introduced, everyone thought that sales and orders would continue thanks to the Internet, but this is not the case. When people are in an environment of uncertainty and the dollar starts to soar, they stop buying anything that is not essential.
Have you ever had to lay off employees?
- Our employees are always our priority. I am fighting to the last to retain everyone who is effective in our business. I am confident that any crisis can be overcome with a good team. A good team is worth its weight in gold.
How do you manage?
- We, like everyone else, are trying not to accumulate losses. We have abandoned all development projects, shopping centre anniversaries and outdoor advertising. Although we have very good computers, everything is running. We understand that if we continue to accumulate these debts, no one will forgive us and we will have to pay them off sooner or later.
We are currently negotiating with all our tenants. After all, the performance of shopping centres depends on the success of each of them. It depends on what the shopping centre is filled with, how it lives. If we maintain partnerships with all of these people, it will be much easier to launch again and gain efficiency in the future.
How long do you think we will be able to overcome this crisis?
- I think it will be at least a year. Therefore, I urge all our partners to hold hands and cooperate, understand and hear each other. This is very important. Of course, now we can say that no one owes anything to anyone and everyone has to do as they please. But it is much easier to endure the consequences of this crisis, stick together and, once these quarantine measures are over, roll up our sleeves and really start working from scratch.
We understand that everything we have done over the past five years will now go back to zero and we will have to work from scratch.
